Ethnic concentration and entrepreneurship: the case of African Americans in three US metropolitan areas

Using 2006-2010 American Community Survey data and a multilevel research design, this study examines how the spatial concentration of African Americans within local labor markets is associated with the probability of self-employment and job earnings from business ownership. We find a negative relationship between the spatial concentration of African Americans and their business ownership in Miami, but not in Atlanta. In Detroit, a higher percentage of US-born African Americans in the local labor market is actually associated with a higher probability of business ownership. The relationship between the percentage of African Americans and job earnings also differs across the three study areas. These results suggest that the relationship between racial/ethnic concentration and African American entrepreneurship is highly contingent on the economic conditions and demographic composition of local labor markets.